George Osborne's budget to include shakeup of Sunday trading laws

The biggest shakeup of trading laws since the reforms of the 1990s is set to be unveiled in the budget on Wednesday.

George Osborne will hand responsibility for Sunday trading laws to Britain’s towns and cities, allowing them to decide how long shops can stay open, in a move that will put an end to the national ban on large stores staying open for more than six hours.

The six-hour rule was relaxed for six weeks in July 2012 during the Olympics, resulting in a relatively significant surge in sales. The Liberal Democrats, then part of the coalition government, opposed a permanent relaxation at the time, insisting that Sunday should remain special and that the compromise between consumers, traders, shopworkers and the religious should be retained.

Osborne has decided that verdicts on similar relaxations of the law should in future be taken at a local level, so that areas that think longer opening hours would boost economic activity would be free to do so. The supermarkets are divided over the wisdom of opening hours for longer on Sunday.

The budget is expected to announce a consultation on two proposals: devolving power over Sunday trading law to elected mayors, and also to local authorities. If the reform was only handed to elected mayors, it would have a much slower impact since the number of mayors is going to be limited for the foreseeable future.

Osborne said: “Even two decades on from the introduction of the Sunday Trading Act, it is clear that there is still a growing appetite for shopping on a Sunday. There is some evidence that transactions for Sunday shopping are actually growing faster than those for Saturday.

“The rise of online shopping, which people can do round the clock, also means more retailers want to be able to compete by opening for longer at the weekend. But this won’t be right for every area, so I want to devolve the power to make this decision to mayors and local authorities.

“This will be another part of my plan to ensure a truly national recovery, with our great towns and cities able to determine their own futures.”

Sunday trading laws allow all stores to open for six hours between 10am and 6pm, while small shops covering less than 3,000 sq ft, or less than 280 square metres, can open all day.

The lobby group Open Sundays claims the reform would bring in £20.3bn over 20 years to the British economy.

At the time of the temporary exemption for the Olympics, John Hannett, general secretary of the shopworkers’ union, Usdaw, said: “Usdaw remains vehemently opposed to the deregulation of Sunday trading and we expect the government to abide by its commitment that this summer’s temporary suspension will not lead to any further attempts to extend Sunday opening hours.

“The government failed to make a coherent business case for the suspension and there is no evidence that it will boost the economy or tourism.”

Under existing laws, shopworkers have a right to opt out of Sunday working but, in practice, that right can be reduced if employers put pressure on their staff.

Research by the New West End Company, the London business voice for the West End, has shown that extending Sunday trading by two hours in London alone would create nearly 3,000 jobs, and generate more than £200m a year in extra income. Reform would bring Britain in line with its international competitors. For instance, Paris has recently relaxed restrictions on Sunday trading, while there are none at all in New York.

The chancellor’s plans are expected to be taken forward in the government’s enterprise bill in the autumn.

High street shops claim to have been under growing pressure from online retailers, which now account for 11% of retail sales overall – rising to 17% in the month before Christmas.